Caterpillar Chairman and Chief Executive Officer Doug Oberhelman blamed "currency translation and hedging losses, an additional $1 billion of dealer machine inventory reductions," as well as a $1.2 billion decline in its own inventories for the relative weakness.

Weaker-than-expected demand from customers has hurt CAT over the past year, according to William Blair analyst Lawrence De Maria.

"You have this double whammy where dealers and CAT are both reducing inventory. You lose sales to the dealers and you're losing the factory efficiencies which affects your profitability," De Maria said.

Dealers reduced substantially more inventory than expected "providing a healthier inventory situation in Construction Industries in 2014," wrote Goldman Sachs analysts in a note following the release.

Caterpillar management guided to $1 billion in share repurchases for the third quarter, while Goldman analysts hadn't expected a buyback.

Jefferies analyst Stephen Volkmann pointed to CAT's mining segment as driving the miss, as revenue fell by 34%. Construction and power systems segments were also weak, he argued.

Volkmann added that the miss appeared "largely driven by underabsorbtion in both resource and construction which posted decrementals of 48 and 67%, respectively." He pointed to margins in the Power Systems segment as "actually a slight positive surprise."

The hedging losses were a surprise to William Blair's De Maria.

"Usually currency affects them but hedging losses not necessarily," he said.

Caterpillar is scheduled to host a conference call with analysts at 11 a.m. EST.